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SCOTUS EPA Ruling is a Breath of Fresh Air

The SCOTUS ruling against the EPA was a breath of fresh air (see what I did there?). Before adjourning until October, the Supreme Court decided that recent EPA rules did not consider cost compliance. The Washington Examiner had a good overview of the ruling. This decision will likely affect other recent EPA rules.

“The Supreme Court ruled 5-4 against Environmental Protection Agency pollution rules for power plants Monday, in a blow to President Obama’s environmental agenda.

The majority decision, written by Justice Antonin Scalia, said the EPA has to consider the costs of complying with the rules and sent the air pollution regulations back to the agency.

The EPA rules in question regulate hazardous air pollutants and mercury from coal- and oil-fired power plants, known as the MATS regulations. The regulations went into effect April 16. The utility industry had argued that the rules cost them billions of dollars to comply and that EPA ignored the cost issue in putting the regulations into effect.

“EPA must consider cost — including cost of compliance — before deciding whether regulation is appropriate and necessary. It will be up to the agency to decide (as always, within the limits of reasonable interpretation) how to account for cost,” Scalia wrote in agreeing with the industry.

The decision will have repercussions for other EPA regulations that are key to Obama’s climate change agenda. The EPA will now have to examine the cost of compliance for the Clean Power Plan, which is at the heart of the president’s environmental agenda.

Many of the companies have either made the investments or closed power plants to comply. If the investments necessary to upgrade a plant to comply with the regulation aren’t justified when considering the operational costs, revenues earned and other factors, then the decision is made to retire it.

The D.C. Circuit Court Appeals favored the EPA in a previous lawsuit filed by the industry, attempting to overturn the rules, which is why they took it to the Supreme Court to decide the cost issue.

The D.C. Circuit was split in its decision, but the majority ruling prevailed. At the center of the case is the question of whether the regulation of hazardous air pollutants from electric utilities are “appropriate and necessary.” On that issue the court was split, but a two-judge majority agreed that the EPA could ignore costs in determining whether to regulate the utility sector.

The D.C. Circuit majority also agreed the EPA could focus solely on the utilities’ contribution to the pollutants of concern, rather than identifying any specific health hazards attributable only to utility emissions.

The EPA had argued that the rules are both appropriate and necessary regardless of the costs, and that it has the discretion under the law to act as it deems fit in regulating hazardous pollutants.”